Sorry, but if the Israelis want to solve the "Palestinian Question", they will have to kill them all. They ain't going anywhere.
So, in your view, the only options are (1) allow an Arab majority to destroy Israel, or (b) kill all the Palestinians?
Man, I'm glad you're not at the negotiating table.
How about this solution instead.
Israel remains as a Jewish State with an undivided Jerusalem as its capital, and the Arabs recognize and accept these facts. The parties negotiate borders that result in the bulk of the West Bank and all of Gaza becoming the State of Palestine. "Palestinians" have no "right of return" to Israel. And, finally, the State of Palestine can deal with its own population and infrastructure needs, just as any sovereign state does.
Where's the flaw in that?